In our new article, we are going to talk about disputes that can be resolved by alternative means, using the services of certain institutions. Today we will look at how this works in Portugal and what means and methods are available to us.
Alternative dispute resolution clearly saves both time and money: when conflicts arise, this method can be a solution to avoid the financial costs and time delays associated with litigation. Using alternative dispute resolution is not only cheaper, but also requires less bureaucracy, simplifying processes that would otherwise take much longer.
Let's take a lively and controversial example that might be of interest to the reader. Imagine that a consumer goes to a bank to take out a mortgage loan. He encounters many obstacles and excuses, resulting in a rejection. The customer realizes that the cancer he had but was cured of ten years ago is the sole and exclusive basis for this rejection. And he knows that the law is on his side, as it provides for the right of oblivion (direito ao esquecimento). What can be done in such a situation? First, start negotiating: you can talk to the manager himself, demanding the correct application of the law, armed with extracts from it. If the problem is not resolved at this level, it is possible and necessary to file a complaint using the means provided for by law, for example, a book of complaints or its electronic version. At this stage, it is also possible to duplicate your complaint on DECO PROTESTE's Reclamar platform, which can help put pressure on the bank to resolve the problem. As a consequence of these actions, the complaint will reach the Banco de Portugal (Bank of Portugal), which, upon finding any irregularities, will force the bank to withdraw and even fine it. If the bank refers to the insurance company's refusal, the consumer from our case can also file a complaint with the Supervisory Authority for Insurance and Pension Funds (Autoridade de Supervisão de Seguros e Fundos de Pensões).
Thus, the out-of-court method is one way to resolve a conflict without going to court: quite quickly and free of charge. For this purpose, there are various ways of protecting rights and available mediation organizations that seek to establish communication and reconcile the parties. These are the so-called alternative dispute resolution organizations (resolução alternativa de litígios - RAL). A list of these organizations can be found on the Direção-Geral do Consumidor website, and they are spread throughout Portugal. They follow the process step by step through mediation, conciliation, arbitration and so on. Usually a decision is made within three months with the support of the Ministry of Justice (Ministério da Justiça).
The consumer should pay attention to the following profile organizations that deal with pre-trial resolution of frequently arising disputes:
- Arbitration Center for the Automobile Sector (Centro de Arbitragem do Sector Automóvel (CASA);
- Center for Insurance Information, Mediation and Arbitration (Centro de Informação, Mediação e Arbitragem de Seguros (Cimpas);
- Ombudsman for travel and tourism agency clients (o provedor do Cliente das Agências de Viagens e Turismo (provedor APAVT).
The first handles consumer disputes related to auto repair services, the sale of fuel, oils and lubricants, the purchase and sale of parts, and new or used cars. The second organization specializes in insurance disputes. The Ombudsman is responsible for all disputes related to travel agencies, as the name suggests.
For example, to use the arbitration centers, go to the one located in the region where the purchase was made or the service contract was concluded. If there is no regional center, the consumer has the National Center for Information and Arbitration of Consumer Conflicts (Centro Nacional de Informação e Arbitragem de Conflitos de Consumo), which will perform the same role. Most of the disputes that go down this route concern purchases or services that do not exceed €5,000. After all, this covers a large part of consumer disputes: product defects, validity of warranties, misleading promotions, etc.
Arbitragem necessária (necessary arbitration) - what is it? If the negotiation and claims process has failed, the dispute can be referred to arbitration (tribunal arbitral). The process is quick and less expensive for the parties than standard court arbitration. To apply for such arbitration, the consumer only needs to expressly declare his desire, without the need to obtain the consent of the other party. In most cases, the value of the goods purchased or services rendered cannot exceed €5,000. In the case of a consumer dispute involving public services, there is no limit on the value. In such conflicts, consumers must be notified that they can be represented by a lawyer or solicitor. There is no fixed court fee: it will be determined at the end of the case, which, by the way, is a cat in the bag, as no lawyer can really say how much his client will pay in the end.
A schematic sequence of actions to solve the problem "How to solve a dispute without going to court" could look like this.
- Negotiations (Negociação). If you have made a purchase or entered into a contract for services, but for some reason you are not satisfied, you should always start by negotiating with the seller. The reasons can be very different: the presence of a defect or problems with the warranty. The goal of negotiation is for one or both parties to change their demands until they come to a solution that satisfies them. If a conflict is over a purchase at a physical store, you can negotiate directly at the counter or talk to a manager. If, on the other hand, the purchase or contract was made online, the easiest way to contact the seller is by phone, such as a customer service hotline. You can use any of these communication methods to try to negotiate. With this plan, the parties can negotiate on their own (without hiring lawyers), the process is free, faster and more informal. It also does not require any specialized knowledge.
- Complaint (Reclamação). If negotiations have failed and the consumer believes he or she has grounds to file a complaint, he or she may do so through a traditional or electronic complaint book. The complaint book is mandatory and must be provided immediately upon the consumer's request. In case of refusal, the consumer can even insist on the presence of a police representative. The electronic book is also mandatory and has its advantages: it gives the consumer more time to think and allows him to file a complaint at any time. In addition, the complaint is automatically forwarded to the supervisory authority and must be answered within 15 working days. Consumer associations and local consumer information centers (Centros de Informação Autárquicos ao Consumidor) can also be a good solution. An online dispute resolution platform is another option for resolving many conflicts arising from online shopping - Plataforma de Resolução de Litígios em Linha.
- Alternative dispute resolution organizations - mediation (Recurso a entidades de resolução alternativa de conflitos - Mediação). If you are still unable to reach an agreement using the previous methods, you can turn to organizations other than traditional courts or even justices of the peace: alternative dispute resolution organizations (RALs). These processes are not very costly (and may even be free) and are still faster and more informal than the standard lawsuit process. Statutes of limitation are suspended from the time the mediation protocol is signed. While the parties may be assisted by an attorney, and this can be helpful, the attorney does not act on behalf of the parties, but in a cooperative spirit, protecting the interests of the party he or she represents. The resolution of the conflict lies directly with the parties themselves. The mediator provides the communication between them, then the mediator should help, assist, but not guide, impose a solution or advise.
- Conciliation (Conciliação). The judge has a direct interest in reaching an agreement and wants to reach a consensual solution as soon as possible, ending the conflict. The main difference with mediation is that the judge has a real opportunity to change the dynamics of the process by advising the parties and moving them towards an agreement. Conciliation is usually used as a second option if mediation has failed.
- Arbitration (Arbitragem). At this stage, the decision must be entrusted to a third party based on the will of the parties. In other words, an arbitral tribunal. Arbitration is typically voluntary if previous attempts to reach an agreement have failed. An arbitration award is binding on the parties in the same way as a traditional court judgment. If one party fails to comply with the arbitration award, the other party may apply to the court of first instance to enforce it.
Friends, that was just an introduction. Since the topic is voluminous and full of details, I suggest diving deeper into it and exploring each of the options in more detail. So, let's look at the most complicated ones and learn how to work with them.
Arbitration
Arbitration centers (centros de arbitragem) can be used to resolve a wide variety of conflicts, such as claims against government agencies, insurance or consumer issues. They can provide information, mediation and conciliation. If mediation does not work and no agreement can be reached, arbitration can be resorted to, which takes place before an arbitration tribunal (tribunal judicial). The decisions of these tribunals have the same weight as decisions made by a judicial body. If it is not implemented, the aggrieved party may apply to the court of first instance (tribunal judicial) to enforce it. Arbitration can be used both to resolve conflicts that have already arisen and to prevent conflicts that may arise in the future, including, for example, a clause in a contract. These cases are usually resolved quickly: in arbitration centers supported by the Ministry of Justice, the time frame is about two to three months, and in others it is no more than a year. How it works. Both parties submit their dispute to a neutral and impartial person - an arbitrator chosen by the parties or appointed by the arbitration center. However, for a dispute to be referred, both parties must agree to it. The exception is low-value consumer disputes (i.e., with a value of €5,000 or less): in this case, the arbitration center is selected by the aggrieved party, in this case, the consumer. The cost of the services is lower than filing a statement of claim in court. In this process, the parties can represent themselves, but if they wish, they can be accompanied by a lawyer - it is not prohibited by law. The maximum term of the process in arbitration - no more than 12 months, although according to statistics, proceedings in arbitration centers supported by the Ministry of Justice, take an average of 2 to 3 months. You can find the location of arbitration centers supported by the Ministry of Justice on this page by selecting the "Institutional Arbitration Centers" (Centros de arbitragem institucionalizada) option. So what types of arbitration exist in Portugal?
- Consumer Arbitration (Arbitragem no Consumo). There are only seven Consumer Arbitration Centers, each operating in a limited geographical region of Portugal, and one that covers areas not included in the previous centers. Their purpose is to resolve consumer disputes, that is, those that may arise in connection with the purchase of goods or services by a consumer and which are not intended for professional use. These centers can deal with disputes related to, for example, aggressive sales, the provision of telecommunications services or, for example, disputes related to mail and parcels.
- Arbitration in the automobile and insurance sectors (Arbitragem nos setores automóvel e segurador). Disputes related to the automobile and insurance sectors are quite frequent, so special arbitration centers have also been created for these areas in order not to overburden the courts and arbitrations of general jurisdiction. The already mentioned above Center for Insurance Information, Mediation, Ombudsman and Arbitration (Centro de Informação, Mediação, Provedoria e Arbitragem de Seguros (CIMPAS) is authorized to resolve disputes between the insured and the insurer, insurance intermediary or broker. CIMPAS resolves situations involving various types of insurance, including life, health and auto insurance. For example, issues that may arise from motor vehicle accidents - except those that result in death or permanent disability.
- Arbitration for Intellectual or Patent Property, Domain Names, Firmas e Denominações (Arbitragem para a Propriedade Industrial, Nomes de Domínio, Firmas e Denominações). Trademarks, patents or company names often give rise to disputes that can be resolved through ARBITRARE. This center covers situations between two or more individuals, as well as between an individual and the authorities responsible for registering trademarks, patents, company names and domain addresses pt. The use by another company of a registered patent or a domain name matching a trademark previously registered by another person, industrial property rights between reference and generic drugs are some examples of conflicts that can be resolved at ARBITRARE.
- Administrative and Tax Arbitration (Arbitragem Administrativa e Tributária). The Centro de Arbitragem Administrativa (CAAD) is responsible for resolving disputes related to the civil service. For example, when an official disagrees with a disciplinary sanction imposed on him or her. This body is also authorized to resolve disputes between taxpayers and the Tax Service (Autoridade Tributária - AT). Imagine, for example, that you do not agree with the value assigned to your house for the IMI property tax: you can contact CAAD to resolve the dispute.
Magistrates' Courts (Julgados de paz)
Another means of alternative dispute resolution is the Magistrates' Court, where conflicts related to, for example, contracts, property and consumption are heard. The process begins when both parties agree to the intervention of a mediator appointed by the Ministry of Justice, who can guide the parties to a solution satisfactory to both. If mediation is not enough to find a solution, the case is referred to a magistrate, who will also try to reach an agreement. If the judge's intervention fails to resolve the conflict, the next stage is a trial before a justice of the peace, which proceeds in much the same way as in a court of general jurisdiction. The parties are heard, evidence is presented, and on their basis the judge makes a decision. And this decision has the same force as the decisions made during the traditional court proceedings. If the amount in dispute is €2,500 or more and one of the parties disagrees with the decision, they can appeal to the Court of First Instance and request a review of the decision. However, in order to appeal to a justice of the peace, there are certain conditions. One of them is that the amount of the claim cannot exceed €15,000. In addition, the justice of the peace cannot intervene in cases involving family, inheritance or labor issues. What can be decided in a magistrates' court? Magistrates' Courts can be used, for example, to enforce obligations (other than monetary ones. The magistrates' courts can also be used to resolve conflicts over the rights and obligations of joint owners. Issues related to a lease (e.g., a suit to recover rent) or issues related to breach of a civil contract may also be addressed there. When appealing to the magistrates' court, a flat fee of €70 is charged, which in principle must be paid by the losing party, unless the judge decides to split the amount between the parties. If the parties reach an agreement in mediation, they each pay €50. The average duration of a case under this method of conflict resolution is six months. Both parties must appear in person, and each can present their position orally. The use of a lawyer or attorney is permitted, but becomes mandatory only in cases provided for by law and when appealing against a court decision.
The Alternative Dispute Resolution Platform (Plataforma RAL+) enables the use of magistrate courts as well as state mediation systems and arbitration centers. These services can be used in person or digitally at a single point of access.
Once again, it should be noted that justices of the peace can only rule on cases up to a value of 15,000 euros. Justices of the peace cannot hear conflicts related to:
- family matters;
- by inheritance;
- labor disputes.
You can find more information about justices of the peace on the website of the Directorate General of Justice Policy (Direção-Geral da Política de Justiça), and you can find out where they are located by selecting Justices of the Peace (Julgados de Paz).
Mediation (Mediação)
Alternative dispute resolution may also include mediation, which aims to encourage communication between the parties in order to find a solution. However, mediation is only possible if both parties agree. Mediation helps people in conflict to communicate and find a way out of the situation, rather than taking the case to court. Its task is to facilitate and encourage communication, helping to reach an agreement. The decision should be made by the parties to the conflict. In addition, the content of mediation sessions is confidential and cannot be used as evidence in court. The mediator should:
- to be impartial to all participants;
- Facilitate and encourage communication between conflicting people;
- help the conflicting parties come to an agreement.
Unlike arbitration or magistrates' courts, the mediator cannot make decisions. The decision, as mentioned above, is made directly by the parties to the conflict. In Portugal, mediation is regulated by Law 29/2013 of April 19 and mediators must comply with the European Code of Conduct for Mediators (Código Europeu de Conduta para Mediadores). The Directorate General for Justice Policy (DGPJ) manages several public mediation systems on behalf of the Ministry of Justice:
Family Mediation System (Sistema de mediação familiar). This system is available throughout the country and is used to resolve conflicts related to, for example, parental responsibilities, divorce and property division, alimony assignment and modification, family housing allocation and other family-related issues. To begin the family mediation process, the conflicting parties must agree to mediation either on their own initiative or by order of a judge. An initial session is then scheduled to explain the rules, rights and responsibilities. At the end, once an agreement is reached, a mediation protocol is signed. At subsequent sessions, which will last as long as it takes to reach an agreement, the parties can choose whether they want to be alone or prefer to be accompanied by an attorney. The cost of the family mediation service, regardless of the number of sessions, is 50 euros for each party. The time limit for completing the process is three months, but if the mediator and the parties agree, it is possible to ask the DGPJ for an extension. On average, however, it usually takes no more than two months to resolve a conflict. Mediation can be terminated at any time, either by the mediator or by the parties. In order for agreements reached during mediation at the initiative of the parties to be enforceable in court, they must be ratified by a judge or submitted to the civil registry (conservatória), in the case of divorce proceedings, for example.
Labor Mediation System (Sistema de mediação laboral). This system brings together more than 80 organizations, including industry associations. The Sistema de Mediação Laboral (SML) operates only in mainland Portugal and is a form of alternative resolution of labor disputes, such as: reduction of working hours and wages by the employer, employee's refusal to work overtime, refusal of vocational training, etc. The process is initiated by one of the parties (employer or employee) or by a decision of a judge during a hearing. The process is initiated by one of the parties (employer or employee) or by a judge's decision in a court proceeding. However, in this case, the conflicting parties must come to an agreement. After the first, informative session, there are as many more sessions as necessary to reach an agreement. The cost of such mediation is 50 euros, regardless of the number of sessions held. On average, such cases are resolved in 28 days, but there is a time limit of three months for maximum processing time. This period can be extended if the mediator and the parties agree. The agreement is in writing and signed by the parties. If consensus is not reached, the case can be taken to court. However, as with family mediation, labor mediation meetings are confidential and cannot be used in court.
Criminal Mediation System (Sistema de mediação penal). At the moment, the system is only available in the courts of Barreiro, Braga, Cascais, Coimbra, Loures, Moita, Montijo, Porto, Santa Maria da Feira, Seixal, Setúbal and Vila Nova de Gaia, as well as in the pilot regions of Alentejo Litoral, Baixo Vouga and Grande Lisboa Noroeste. The following set of circumstances is required to take advantage of this alternative dispute resolution method:
- the existence of criminal proceedings;
- the dependence of the offense on a private prosecution or complaint;
- offense is a crime against person or property and is punishable by up to five years' imprisonment or a fine;
- offense are not crimes against liberty or sexual self-determination;
- the offender is at least 16 years old.
For example, criminal mediation can be used for alternative dispute resolution in cases such as offenses against physical integrity or negligence, threat, defamation, home invasion or violation of privacy, theft, breach of trust, damage, fraud. During the investigation phase of a crime, the accused and the injured party may voluntarily and by mutual agreement request the prosecutor's office to refer the case to criminal mediation. The decision may also come from the prosecutor's office, but it must always be agreed upon by both parties. Otherwise, the case will be heard in court. Mediation sessions are free of charge and the parties do not need to hire a lawyer. If the process has started, it must be completed within three months. This period can be extended if the mediator believes there is a possibility of reaching an agreement, but this extension cannot exceed two months. The agreement to be reached cannot include custodial sanctions, obligations that violate the dignity of the accused or last more than six months. The agreement may mean, for example, an apology, payment of a certain amount, or restoration or restitution. The agreement must be reviewed by the prosecutor's office, which checks its legality. If she agrees, the criminal mediation process is completed. This is equivalent to the injured party withdrawing his complaint and the accused not objecting. If the agreement is not honored within the time period specified therein, the complaint can be re-filed and the investigation reopened.
In addition to the lists of mediators in state mediation systems, which can be accessed through the links to each of these systems, you can also consult the list of conflict mediators organized by the Ministry of Justice. Agreements reached in mediations conducted by private mediators on this list are guaranteed to be enforceable in the same manner as agreements reached in mediations conducted by public mediation systems. The issues involved in each case are not subject to mandatory court approval.
Reconciliation (Conciliação)
Conciliation is a method of dispute resolution in which conflicting parties agree to the intervention of a third party (the conciliator) to help them find an amicable solution to the dispute. The conciliator plays a more active role in finding a solution to the conflict than the mediator, but must always maintain a neutral and impartial position. This is the difference between conciliation and mediation. The mediator facilitates a dialog between the parties, who work out a solution to the conflict without the mediator's intervention. A conciliator facilitates the re-establishment of dialog between the parties, but may also propose a peaceful solution to the conflict. On behalf of the Ministry of Justice, the Directorate General for Justice Policy (DGPJ) manages the State System of Support for Reconciliation in Excessive Debt (Sistema Público de Apoio à Conciliação no Sobre-Endividamento (SISPACSE). SISPACSE facilitates the resolution of conflicts arising from the non-fulfillment of monetary obligations by bringing together all stakeholders with the support of a conciliator, a professional qualified to use methods that facilitate agreement.
The Practical Guide to Justice (Guia prático da Justiça) is a very cool thing. It is a tool available to all citizens that aims to speed up their interaction with the justice system by finding the information they need at any given time. The new version of GPJ is based on the GPT 4.0 language model created by OpenAI and Microsoft and available on Microsoft Azure OpenAI platform. GPJ is a project coordinated by the DGPJ with the support of Microsoft with the goal of interacting with citizens using natural language, without the need to collect personal user data. The new version of GPJ includes a mechanism to collect feedback with responses. The aim is to enhance human learning and control, allowing for continuous improvement of the tool. All responses are prepared taking into account the information on the Digital Justice Platform (Plataforma Digital da Justiça), which the GPJ organizes and presents to the user in a simple and concise manner.
It is mportant: in any case of conflict resolution, either party may apply to the Social Security Service (through the Segurança social portal): in case of low income, the applicant is entitled to claim full reimbursement of legal expenses from the State or a decent discount. To do this, you need to have a social security number, naturally. How to apply for it, we wrote here. But keep in mind that Segurança social refers to the last 3 months reflected in its system as deductions, not the IRS for the previous accounting year, as you might think. Therefore, if it considers that you are earning enough, it may refuse to reimburse you, but offer to pay in installments, attaching a simulation of installments to the letter of justification.
In general, as always, I hope that this article will only expand your theoretical knowledge of how things work in Portugal, including the extrajudicial system of conflict resolution, and this information will never be useful to you in real life. But, nevertheless, informed is armed! Traditionally, I would like to wish everyone good luck, peace of mind and no reason for disputes! I hope you found this article interesting. Don't forget to look through our collection of articles, there are sure to find answers to almost all questions about life in Portugal. And if you can't find the answer to your specific question there, we offer you personal consultations of specialists with a personalized approach in the most popular areas: law, real estate, and cryptocurrency exchange.
